Recent rumors on social media platform X wrongly accused presidential candidate Kamala Harris of endorsing President Biden’s 2025 proposal for a 25% tax on unrealized capital gains. Let’s uncover the truth behind these headlines and the confusion they caused.

Misinformation and Its Impact on Crypto Investors

Earlier this week, many crypto investors were caught up in a swirl of misinformation. Reports surfaced that Kamala Harris had endorsed a new tax on unrealized gains, originally proposed by President Joe Biden for 2025. This misinformation spread quickly, causing outrage among the crypto community.

Unrealized gains refer to the increase in value of an asset before it is sold. For instance, if you bought Bitcoin at $50,000 and its value rose by 22%, you only realize those gains when you sell the Bitcoin.

Clarifying the Misunderstanding

The confusion was fueled by Harris’ campaign team releasing her economic plan and stating that she would raise the corporate tax rate if elected. This led to assumptions that Harris had endorsed the entire tax policy proposal for 2025, which includes the controversial tax on unrealized gains.

“Harris did not endorse an ‘unrealized gain’ tax.” – Adam Cochran

Notably, Harris’ team did not reference or endorse the 256-page document titled “General Explanations of the Administration’s Fiscal Year 2025 Revenue Proposals,” published in March.

Breaking Down the Tax Proposal

Biden’s 2025 tax proposal includes a minimum tax of 25% on total income, including unrealized capital gains, for individuals with wealth exceeding $100 million. This proposal aims to address the loophole allowing wealthy individuals to pass on asset value to beneficiaries without paying income tax on gains.

Currently, long-term capital gains are taxed at a maximum rate of 20%, or 23.8% with the net investment income tax (NIIT). Biden’s proposal would tax long-term capital gains at ordinary income tax rates for individuals with taxable income over $1 million, pushing the rate to 44.6% when combined with the NIIT.

Harris’ Proposed Tax Policy and Its Impact on Crypto

Harris has proposed raising the corporate income tax rate from 21% to 28%, which could generate significant revenue for the federal government. This increase could impact larger crypto companies, potentially reducing investment in new projects or increasing user fees.

Additionally, Harris’ economic agenda includes tax incentives for affordable housing construction and support for new homeowners. However, these housing-related policies are unlikely to directly affect crypto holders.

Public Reaction and Expert Opinions

The debate around Harris and her rumored stance on taxing unrealized capital gains sparked intense discussion on social media. Financial experts and industry leaders criticized the idea, arguing that taxing unrealized gains is impractical.

“Just a friendly reminder that taxing unrealized capital gains is dumb.” – Douglas A. Boneparth

“Unrealized gains are simply a field in a database and not useful until converted into something of value.” – Aaron Levie

While Harris’ campaign has not officially endorsed the entire Biden administration’s tax proposal for 2025, the topic has stirred significant controversy and debate within the crypto community.

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